Promotions and incentives exist for one reason: to change consumer behavior. Just like “Try Us Out — 15% Off” coupons transform passersby into paying customers, “Happy Birthday” special offers drive more frequent visits from repeat patrons.
At face value, developing the optimal strategy for promotions seems easy. The more valuable the incentive, the greater the sales increase and the higher the cost to the sponsoring brand. Find the sweet spot that maximizes sales without overblowing costs and, done.
If only. Unfortunately, (a) nobody can predict exactly how coupons and special offers will influence consumer behavior, and (b) customer preferences change over time. As such, a strategy for promotions cannot rely only on static information — marketers have to develop an iterative approach. Being able to efficiently create, test, and prove hypotheses separates high-performing promotions strategies from others.
By definition, the process of iteration requires two capabilities. First, marketers need to have the flexibility to offer incentives of various types and values. Comparing a 15%-off versus a 20%-off “Happy Birthday” coupon only works when you can easily offer customers either option. Second, marketers need to tie promotions to purchase data to understand what works and what doesn’t. Identifying the 15%-off coupon as superior requires being able to say definitively that it produced a bigger impact on sales and customer lifetime value.
Marketers on the whole struggle with both capabilities, as traditional incentive delivery channels like Twitter, Facebook, email, online, SMS, and direct mail limit their options. All require complex and costly point-of-sale integrations to tie promotions to purchase data, as metrics like fans, followers, subscribers, likes, open rates, and engagement rates do not tell anything about sales or lifetime value. Marketers still lose out even with an operational integration, as adding new types or values of incentives requires significant IT investment and time.
For these reasons, most promotion campaigns fall short.
The majority of U.S. consumers feel dissatisfied
with the incentives offered by their favorite brands and
of customers only make a single visit to a multi-location business within a six-month time frame.
For marketers to be successful, they have to be able to customize incentives and tie promotions to customer purchase data.
Thanx Promotions dramatically improves the process of sending, receiving, and redeeming coupons and special offers for merchants and their customers. Merchants can test any incentive they want — monetary or non-monetary — and track the precise impact on sales and lifetime value in real-time.
Unlike other solutions, Thanx automatically ties incentives to specific customers, purchases, and purchasing histories, allowing merchants to understand how offers affect customer spending and behavior over time. Key performance indicators available on demand include redemption overspend, average check size increase, and number of repeat visits. The Thanx consumer experience also eliminates the need for check-ins, added steps at checkout, and coupon code validation.
As a result of these benefits, merchant partners using Thanx Promotions see an average 3X return on investment and 5X sustained engagement over time. Please see the Promotions
1-Click Marketing Campaigns case study
for more details.
If you have additional questions about how coupons and special offers affect customer spending and lifetime value, please
and we’ll get right back to you. We’re happy to help you figure out how to use promotions to influence customer behavior and create results.